I really enjoyed reading Jack Schwager books (Market Wizards and New Market Wizards) where he interviews top traders. So, I was pretty pleased when I found this presentation video where Schwager goes over his findings on what makes great traders. Entertaining and worth a watch at the weekend…
His material is not directly linked to automated trading but there are still relevant points to system development and trading strategy.
He starts with an empirical rebuttal of Random Walk Theory and explains that there is no holy grail. He then covers most of his points by giving anecdotes and insight from the traders that he interviewed in his books (Jim Rogers, Ed Seykota, Larry Hite, etc.).
Some notes from the video (link further below):
- Trade with your personality: build a system that suits your personality. You need to have a system you truly believe in and which matches your personality. You will lose if you buy a system.
- Importance of having a method: system
- Touches on essential points of trading success: risk management, discipline, independence of ideas.
- Losing/being wrong is part of the game.
- Patience, althoug this can be replaced by computerized trading.
- As a side note: computerized trading might be the best way to alleviate some shortcomings of you natural trading abilities (i.e. patience, discipline, sticking to a system/method).
- Passion is necessary: trading is like a game
- There is an interesting question at the end where an attendee asks whether any of the traders that Schwager interviewed managed to succesfully computerize their trading strategy. Schwager replies by the negative!… What about Ed Seykota?…
Anyway, here is the link to the video. It is used as a marketing offer for Ino TV so you have to go through the 1-min intro vid before giving your details (you can just give dummy ones and it’ll let you through after clicking the OK button – no email confirmation):